9:15am (EST)

Cisco Systems (CSCO, $23.29, up $0.38) does it again.  It shouldn’t come as a surprise the company beat earnings because it has always been known as the “penny beater” on Wall Street.  But this time was different.   

For the quarter, Cisco said it earned $1.8 billion, or $0.30 a share, which was down nearly 20% from last year’s number of $2.2 billion, or $0.37 a share, a year earlier.  That are the headline numbers but the company really earned $0.36 a share when you back out stock-option compensation, acquisitions and other write-downs.  Wall Street estimates were for $0.31.

Everybody will be jumping on the Cisco Bandwagon today but we already played this fiddle back in June when we said it would be a $25 stock by October.  Shares printed $24.83 on October 19th.  Our subscribers did well buying the October 20 call options options back in June and cashing out three weeks later for gains up to 80%.  We still like Cisco as a company and think it is one of the better Tech stocks but we don’t see an option trade for this one right now.  Cisco is up 84 cents, to $24.13, before the bell…

At some point today, the Cisco news will wear off and everyone will be focused on Friday’s Jobs Report.  The Department of Labor will release the October employment report and we could get some clear market direction once we get the news.  Today is a tossup and we could see a tight range as bulls and bears take their positions.

Wall Street is looking for a contraction of 150,000 jobs which will look GREAT compared to last month’s job loss of 263,000 but how will the market react if we print 10%?  The jobless rate is expected to come in around 9.9%, which puts us within spitting distance of the all important double-digit mark.  If we get a 10% reading, the bears could make a charge. 

The potential of Friday’s report has us locking in profits and looking for new trades based on the response to the employment news on Friday.  Current Subscribers can check the Members Area for the trade updates.